Power Hour: Some Locks Close on Mississippi River; Corn Basis at Risk

The continued deluge of rain throughout the Heartland escalated Mississippi River water levels to above flood stage at some locations and closed at least two locks late this week.

Locks 22 and 24, both in Missouri, were closed on May 31 by the Army Corps. of Engineers, with locks expected to be closed for at least one week. In essence, this shuts down the flow of barge traffic from the upper to lower river.

The lock at St. Louis was still open May 31, with river levels at 29.6 feet early morning, a 2.2 foot rise in the previous 24 hours. However, the river there was expected to rise to 32.7 feet on June 1 and 38.9 feet on June 3, according to Corps’ estimates. Both would be above the flood level of 30 feet.

If the Mississippi River is closed for shipping only one week, farmers will not likely be impacted in a major way, says Mike Steenhoek, executive director of the Soy Transportation Coalition. Soybean farmers may be scarcely impacted at all, he says, because 80% of U.S. soybeans are exported between September and February. "Not a lot of soybeans remain in the system," he says.

For corn, it’s a slightly different story. "Corn farmers have greater exposure," Steenhoek says. That’s because corn shipments occur more evenly throughout the year. As a result, corn basis for some could widen, if only briefly, Steenhoek says. Of course, the story changes if the locks are closed for a time greater than what’s anticipated.

A potential larger issue than a one-week closure is what impact fast currents and high water levels could have on lock structures. If such water damages locks, it’s possible they might have to remain closed for an extensive period of time to be repaired, having a much larger impact on U.S. farmers, Steenhoek says. He is not, however, predicting this.

In late April, locks on the Mississippi River also closed shipping, but the impact was minimal because they reopened within four to five days. Prior to this week’s lock closures, shipping since late April had been normal.